When computing the quick ratio,the numerator will include all of the following EXCEPT for:
A)net current receivables.
B)short-term investments.
C)inventory.
D)cash and cash equivalents.

Question

Quizplus · Accepted Answer

The quick ratio, also known as the acid-test ratio, is a measure of a company's short-term liquidity. It is calculated by dividing the sum of a company's cash, cash equivalents, and short-term investments by its current liabilities. The numerator includes assets that can be easily converted into cash, such as cash and cash equivalents, short-term investments, and net current receivables. However, inventory is excluded from the quick ratio calculation because it cannot be easily converted into cash.

When Computing the Quick Ratio,the Numerator Will Include All of the Following